G.R. No. 226734 , May 10, 2021
Republic of the Philippines, represented by the Department of Public Works and Highways, Petitioner, vs. Heirs of Spouses Valentina Juan Bonifacio and Aurelio Bonifacio, Respondents.

FACTS

In 2007, the Republic, through the DPWH, filed a Complaint for expropriation of a 913-square meter lot in Valenzuela City registered in the names of the Spouses Bonifacio for the C-5 Northern Link Road Project. The Republic offered compensation based on the zonal value of P2,500.00 per square meter. The heirs conceded the zonal valuation but claimed the prevailing market value was between P10,000.00 to P15,000.00 per square meter due to the lot’s location. The Regional Trial Court issued a writ of possession and order of expropriation in 2009 and later formed a Board of Commissioners. In 2014, the Board recommended just compensation at P10,000.00 per square meter. The RTC rendered a Decision adopting this recommendation, ordering payment of P9,130,000.00 total just compensation, deducting the provisional deposit of P2,282,500.00. It also ordered the Republic to pay 12% per annum interest on the unpaid balance from the filing of the complaint (December 7, 2007) until full payment, and 12% interest on the initial deposit from the filing of the complaint until its deposit (November 21, 2008), plus attorney’s fees and commissioner’s fees. The Court of Appeals affirmed the RTC Decision. The Republic filed a Petition for Review, arguing the just compensation was arbitrary, the legal interest should be 6% per annum pursuant to Bangko Sentral ng Pilipinas Circular No. 799, and that it is exempt from paying commissioner’s fees.

ISSUE

1. Whether the Regional Trial Court imposed the correct amount of just compensation.
2. Whether the Regional Trial Court correctly imposed a 6% per annum interest rate.
3. Whether the Regional Trial Court correctly ordered petitioner to pay the commissioner’s fees.

RULING

1. On just compensation: The Supreme Court held that the determination of just compensation is a judicial function and a question of fact. The findings of the RTC, as affirmed by the Court of Appeals, are binding and not reviewable absent a showing of reversible error. The Court found no abuse of discretion in the RTC’s adoption of the Board of Commissioners’ report, which used the market-data approach and recommended P10,000.00 per square meter. The Court emphasized that under Section 5 of Republic Act No. 8974 , the standards for assessing value are merely permissive for the court to consider.
2. On the interest rate: The Supreme Court modified the interest imposition. Citing Evergreen Manufacturing Corporation v. Republic, the Court ruled that legal interest accrues on the difference between the final just compensation adjudged and the initial provisional deposit, beginning from the time of taking when the owner was deprived of the property. The time of taking was when the RTC issued the writ of possession and order of expropriation in 2009. The Court further ruled that pursuant to BSP Circular No. 799, the applicable interest rate is 12% per annum from the time of taking in 2009 until June 30, 2013, and 6% per annum from July 1, 2013 until full payment. The award of attorney’s fees was deleted for lack of basis.
3. On commissioner’s fees: The Supreme Court ruled that the Republic is exempt from paying commissioner’s fees. Citing Republic v. Garcia, the Court held that in expropriation cases, the Republic is not liable to pay costs, which include commissioner’s fees under Rule 141, Sections 12 and 13 of the Rules of Court. The award of commissioner’s fees was therefore deleted.
DISPOSITIVE PORTION:
WHEREFORE, the Petition is PARTIALLY GRANTED. The Court of Appeals’ January 11, 2016 Decision and August 25, 2016 Resolution are AFFIRMED with MODIFICATIONS:
(1) The just compensation is fixed at P10,000.00 per square meter, for a total of P9,130,000.00.
(2) Legal interest at 12% per annum is imposed on the unpaid balance from the time of taking (the 2009 issuance of the writ of possession and order of expropriation) until June 30, 2013.
(3) From July 1, 2013 until full payment, the total amount of just compensation shall earn legal interest at 6% per annum.
(4) The awards of attorney’s fees and commissioner’s fees are DELETED.